Deploying Electronic Tolls

This paper examines the deployment of electronic toll collection (ETC) and develops a model to maximize social welfare associated with the toll plaza.A payment choice model estimates the share of traffic using ETC as a function of delay, price, and a fixed cost of acquiring the in-vehicle transponder.Delay in turn depends on the relative number of ETC and Manual Collection Lanes.Price depends on the discount given to users of the ETC Lanes.The fixed cost of acquiring the transponder (not simply a monetary cost, but also the effort involved in signing up for the program) is a key factor in the model.Once a traveler acquires the transponder, the cost of choosing ETC in the future declines significantly.Welfare, which depends on the market share of ETC, includes delay and gasoline consumption incurred by travelers, costs to the toll agency, and social costs such as air pollution accruing to society.Finding the best combination of ETC Lanes and toll discount maximizes welfare.Too many ETC lanes cause excessive delay to non-equipped users.Too high a discount costs the highway agency revenue needed to operate the facility.The model is applied to California's Carquiñez Bridge.We conclude by recommending the pace of deployment of ETC on the bridge in terms of the number of dedicated ETC lanes and the appropriate ETC discount